Manually filed Form 10 accepted despite delayed electronic filing under section 11(2) deduction claim

The ITAT Jodhpur allowed the assessee's appeal regarding disallowance of deduction under section 11(2) due to delayed electronic filing of Form 10. The assessee had filed Form 10 manually within the prescribed time limit under section 139(1) before the Territorial Jurisdictional AO on 21-04-2016. The ITAT held that the addition of Rs. 43,911/- was based on a technical flaw, noting that online filing requirements were new from AY 2016-17 and the assessee was unaware of this provision. The tribunal directed that the manually filed form should be considered valid and allowed the assessee 30 days to upload the form electronically if not already done.

---

---

Issues Involved:

1. Validity of the appellate order dated 23-11-2022.
2. Disallowance of deduction under section 11(2) due to delayed electronic filing of Form 10.
3. Adjustment made under section 143(1) by CPC resulting in an addition of Rs. 14 Lacs.
4. Applicability of CBDT Circular No. 6/2020 for condoning delay in filing Form 10.
5. Whether the appeal should have been decided along with the appeal against the rectification order under section 154.
6. Treatment of corpus donations and their exemption under section 11(1)(d).
7. Rectifiability of issues related to delayed furnishing of forms under section 154.

Detailed Analysis:

1. Validity of the Appellate Order Dated 23-11-2022:
The appellant argued that the appellate order dated 23-11-2022 was "bad in law, bad in facts and in violation of the principle of natural justice" due to no opportunity being given. The Tribunal noted that the appellant failed to file Form 10 electronically within the prescribed time, leading to the disallowance of the deduction under section 11(2).

2. Disallowance of Deduction Under Section 11(2) Due to Delayed Electronic Filing of Form 10:
The CIT(A) held that the deduction under section 11(2) was disallowed because Form 10 was not filed electronically within the due date as per Rule 12(2) read with Rule 17(2). The Tribunal upheld this finding, noting that the statutory requirement for electronic filing came into effect from the assessment year 2016-17.

3. Adjustment Made Under Section 143(1) by CPC Resulting in an Addition of Rs. 14 Lacs:
The adjustment made by CPC was based on the non-filing of Form 10 electronically. The Tribunal noted that the appellant had filed Form 10 manually within the prescribed time before the jurisdictional AO. The Tribunal found that the adjustment was a technical flaw and should have been rectified under section 154.

4. Applicability of CBDT Circular No. 6/2020 for Condoning Delay in Filing Form 10:
The Tribunal highlighted that the CBDT Circular No. 6/2020 directed the condonation of delay for the assessment years 2016-17, 2017-18, and 2018-19 if the return of income (ROI) was filed on or before 31 March of the respective assessment years. Since the appellant filed the ROI within the time provided under section 139(1) and Form 10 manually, the Tribunal held that the delay should have been condoned.

5. Whether the Appeal Should Have Been Decided Along with the Appeal Against the Rectification Order Under Section 154:
The appellant argued that the CIT(A) erred by not deciding the appeal along with the second appeal filed against the rectification order under section 154. The Tribunal found merit in this argument, indicating that simultaneous consideration could have resulted in a judicious outcome.

6. Treatment of Corpus Donations and Their Exemption Under Section 11(1)(d):
The appellant contended that the amount transferred to the Jirnodhar Reserve Fund Account was a corpus donation and should be exempt under section 11(1)(d). The Tribunal noted that the appellant had been maintaining separate accounts for corpus donations and that the amount in question was a retransfer to the reserve fund, thus qualifying as a corpus donation.

7. Rectifiability of Issues Related to Delayed Furnishing of Forms Under Section 154:
The Tribunal referred to the decision in the case of University of Burdwan vs. ACIT (ITAT Kolkata), which held that mistakes apparent from the record are rectifiable under section 154. The Tribunal directed that the manually filed Form 10 should be considered, and the appellant should be allowed to upload the form electronically within 30 days from the receipt of the order.

Conclusion:
The Tribunal allowed the appeal, directing the consideration of the manually filed Form 10 and permitting the appellant to upload it electronically within 30 days. The Tribunal emphasized the applicability of CBDT Circular No. 6/2020 and the rectifiability of the issues under section 154.

---